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The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices

17 Pages Posted: 23 Jan 2011  

Robin M Cross

Applied Economics

Andrew Plantinga

Oregon State University

Robert N. Stavins

Harvard University - Harvard Kennedy School (HKS); Resources for the Future; National Bureau of Economic Research (NBER)

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Date Written: January 20, 2011

Abstract

We examine the value of terroir, which refers to the special characteristics of a place that impart unique qualities to the wine produced. We do this by conducting a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attributes, such as slope, aspect, elevation, and soil types, or designated appellations are more important determinants of price. We find that prices are strongly determined by sub-AVA appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, although the reality of terroir – as proxied for by locational attributes – is not significant.

Keywords: wine, vineyard, hedonic price analysis

JEL Classification: C2, Q11

Suggested Citation

Cross, Robin M and Plantinga, Andrew and Stavins, Robert N., The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices (January 20, 2011). Available at SSRN: https://ssrn.com/abstract=1745122 or http://dx.doi.org/10.2139/ssrn.1745122

Robin M Cross

Applied Economics ( email )

221B Ballard Hall
Corvallis, OR OR 97331
United States

Andrew J. Plantinga (Contact Author)

Oregon State University ( email )

232B Ballard Extension Hall
Corvallis, OR 97331-4501
United States

Robert N. Stavins

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1820 (Phone)
617-496-3783 (Fax)

Resources for the Future

1616 P Street, NW
Washington, DC 20036
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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